Top 5 best ways to Earn passive income

 Top 5 ways to Earn passive income

The protagonists of fairy tales discover magic lamps and goldfish in order to obtain anything without exerting any effort. But we'll present some far more practical strategies. The best passive income strategies are listed below. Choose the right one and start earning.

What is passive income

Let's start by defining the meaning of this phrase. So that there are no discrepancies in the future, since people understand different things by passive income. Let's use the definition from Wikipedia.

Income from passive sources doesn't depend on one's everyday activity.

Sounds good, right? Income that comes regardless of whether you do something today or not. But we live in the real world and we understand that this happens for a reason. This requires an initial investment.

They are of two types: financial and labor. In the first case, money is invested, and in the second, time and effort. If everything is clear with this, it's time to go directly to the options for obtaining passive income.

Ways to achieve passive income with financial investments

A common question related to passive income is: how much exactly do you need to invest? It is difficult to give a definite answer. It depends on which scheme you choose. Some passive income ideas can be realized with the help of several thousand rubles. Others will require at least several million.

It is also important how much monthly income you are going to go. The larger the amount invested, the higher these deductions will be. So focus on your financial resources and goals.

Purchase of securities

High risk.

High yield.

Entry requirements start at 30,000 rubles.

It's not a novel idea to invest in stocks, bonds, and other securities. Despite the fact that they do so less frequently than, say, Americans, Russians. The question is vague in regards to the minimal admission amount. In theory, an account can be started with as little as 3,000 rubles. Millions are put into stocks by professional athletes. However, experts suggest that beginners start with 30,000 rubles. This will allow for risk diversification and the appropriate placement of funds.

Considering the difficulty now. It is not necessary to have economic experience. Securities can be purchased and sold by anyone. But it's important to comprehend the fundamentals. Learn about the many kinds of securities, the stock market, and brokers. There are many books and essays on this subject.

Stock investments have a tens of percent return potential, or they might result in losses. Nobody can forecast this with absolute certainty. Acting as an investor comes with risk. As a result, we advise against using the last funds for stock investments.

You must open an account with a brokerage firm in order to begin investing in stocks. who will purchase or sell securities on your behalf. The initiatives of Russian banks acting as brokers have grown in popularity today. Tinkoff Investments, BCS Broker, and Otkritie Broker are a few examples.

Investments in mutual funds

Risk: medium.

Profitability: average.

The minimum amount to enter: from 1000 rubles.

A mutual investment fund is a form of collective investment in securities, in which the management company places the combined funds of shareholders in order to make a profit. To put it simply, several people throw themselves into a common wallet and transfer it to the management of professional financiers. The latter are already deciding how to dispose of the funds.

Anyone can become a shareholder of an open mutual fund. You can even do this online. The share is expected to rise in value over time and you will make a profit if you sell it. Which one - depends on the effectiveness of the actions of the management company.

For example, in 2017, Sberbank Asset Management showed an increase of 40.93%. But this is the best indicator among 247 open funds, of which 72 mutual funds closed the year with losses.

So you should carefully consider the choice of the UK. Statistics for each of them are easy to find in the public domain. But even a successful management company does not guarantee a stable result.

 Investments in real estate

Risk: low.

Profitability: average.

The minimum amount to enter: from 1,000,000 rubles.

If you have an empty property, then it is a sin not to use such an asset and not earn money by renting out the property. Daily or long term. The first option is more profitable, but there is no need to talk about passive income here. It will be necessary to look for and place customers every day.

So we will focus only on long-term leases. Here the task is to find tenants once and sign an agreement with them. Well, then every month to receive rent. However, even this can be avoided. There are specialized companies that manage real estate, for % rent.

Now about how much you can earn on this and what investments are needed if there are no free square meters. For example, we will analyze the price level in St. Petersburg for 2018 according to the Domofond portal.

The average selling price of a one-room apartment is 3,900,281 rubles.

The average rental price of a one-room apartment is 22,192 rubles.

Payback ~175 months, or a little over 14 years.

Of course, this is a simplified calculation without taking into account inflation and price fluctuations in the real estate market.

Car

Risk: medium.

Yield: high.

The minimum amount to enter: from 500,000 rubles.

You can also rent a car. And at the same time, receive greater dividends from smaller investments than when renting an apartment. Although the risk of losing money is higher here. Therefore, carefully consider everything before using this path to passive income.

How much do you earn from car rental? The highest demand for car rental is among taxi drivers. Popular models are foreign cars of the budget segment, such as Hyundai Solaris or Ford Focus. If a new car of this brand is purchased, then the calculations will be as follows:

The car is priced at 500,000 rubles.

Rental income ~2,000 rubles. in a day.

Monthly income ~ 60,000 rubles.

Payback ~250 days or 8 and a half months.

True, there is a nuance - only income was taken into account here. The profit that you receive in your hands will be less due to the associated costs:

If you want to work in a white manner, you are required to pay income tax of 13% on personal income. However, the same applies to renting an apartment.

Insurance. Making a policy is a must, otherwise there will be problems with traffic police.

Maintenance. A heavily used car is prone to breakdowns. So get ready for repair costs.

Thus, renting a car is a fairly profitable way to generate passive income. But also quite complex. It will be difficult for motorists without experience at first.

Joint business

Risk: high.

Yield: high.

The minimum amount to enter: from 500,000 rubles.

In fact, buying company shares is also an investment in a business, for the sake of receiving passive income. But here we will talk about something else - about the organization of the company. Cases where some partners participate with capital, while others invest labor costs, are quite common. Future profits are distributed according to the shares in the company.

By investing in a fast-growing startup, you can recoup them many times over. Or lose if you choose incompetent partners and the company goes bankrupt. So there is not even approximate data on the profitability of this way of investing.

Only one thing can be said with certainty: this is the most risky of the listed methods. Since, according to statistics, 90% of companies close in the first year after founding. Others often face conflicts over the distribution of profits between partners.

There is another way to invest in a startup - crowdfunding . With Kickstarter, you can fund a startup anywhere in the world in minutes. In exchange, they will offer a share in the company or% of dividends. Alas, the risks of project failure and non-return of investments have not been canceled here either.